Raimondo seeks to 'reinvent Medicaid' in R.I.

Thursday

Feb 26, 2015 at 11:00 PM

Medicaid spending this year accounts for about 32 percent of Rhode Island's $8.8-billion budget

By Katherine Gregg Journal State House Bureau

PROVIDENCE, R.I. — Describing Rhode Island's $2.7-billion Medicaid program as "completely unsustainable'' at its current rate of growth, Governor Raimondo on Thursday created a 28-member "Working Group to Reinvent Medicaid,'' with an initial April 30 deadline to make recommendations.

The group she announced at a State House news conference includes the head of the Hospital Association of Rhode Island, the head of the social workers union and one of the state's leading low-income advocates.

When asked if she had ruled out eligibility and benefit cuts in the state budget she will propose to lawmakers on March 12, she said: "Nothing can be taken off the table.''

But rather than "scrambling for cuts,'' Raimondo said: "I am proposing a new approach ... which is not looking at this as just a budget problem.''

"We have a Medicaid system that isn't working,'' she said. "We need to spend less and get better outcomes.... Reinvent the system of care ... [and] crack down on fraud, waste and abuse.''

"This is going to be very hard,'' she said. But "it's work that has to be done.... It's a fiscal reality. It's a human reality ... and the reality is if we don't do this, if we aren't successful, the consequences are unbearable.

"People will continue to suffer. The most vulnerable among us will get poor care and our budget deficits will bankrupt the state, cities and towns. It is completely unsustainable, so we have to do it and we have no time to wait.''

She then signed an executive order spelling out the many problems she wants the working group — co-chaired by Dennis Keefe, the president and CEO of the Care New England hospital network, and Prof. Ira Wilson, the chairman of the Department of Health Services, Policy & Practice at Brown University — to tackle. Among them:

-- The state's "per-enrollee costs are consistently among the highest in the nation,'' with the result that 30 cents out of every state dollar goes to Medicaid.

-- "The majority of health-care services funded by Rhode Island Medicaid are still purchased on a fee-for-service basis,'' when there are alternatives such as "patient-health outcomes and pay-for-performance."

"It is necessary to transform Rhode Island's health-care system to one that pays for the outcomes and quality care Rhode Islanders deserve, rather than for the amount of services provided,'' Raimondo said in her executive order.

Among the working group's specific charges: to look closely at existing programs "that consume a disproportionate share of Medicaid dollars'' and explore how other states have wrung both "savings and improved quality'' out of their Medicaid programs.

Raimondo said the group would begin work immediately, with the goal of submitting a report by the end of April for lawmakers to consider before they vote on a budget for the 2015-16 fiscal year that begins on July 1.

The taxpayer cost for the government-subsidized health plan for the poor has become an issue of increasing concern to Raimondo, lawmakers and interest groups as budget writers grapple with a projected $166.6-million to $200-million deficit in the year that begins on July 1.

House Speaker Nicholas Mattiello voiced his concerns in December: "We have to see why it's growing so rapidly. Is it growing faster than in other states? Are our benefits more generous than they are in other states? Those are comparisons we have to make.''

One-fourth of Rhode Island's residents receive Medicaid.

The last time anyone counted, Rhode Island's cost per Medicaid enrollee was 31 percent higher than the national average, at $9,541 per person. At that level, Rhode Island's per enrollee costs rank second-highest in the nation.

The state budget office anticipates $2.7 billion in Medicaid spending this year, about 32 percent of the $8.8-billion budget. At one point that included a projected $118.4 million in over-budget spending this year. Next year's projected Medicaid tab: $2.8 billion.

On Thursday, Mattiello, who earlier this week sparred with Raimondo over comments she made in Washington, D.C., about the state’s budget process, voiced support for her task-force approach.

“With the House scrutinizing the budget so closely, I felt it would be more appropriate to not have any House members serve on this working group,'' he added.

Raimondo promised that the budget she proposes in two weeks will be "quite specific'' with regard to Medicaid. She would not elaborate, but said "some changes are straightforward,'' while others "require negotiations of contracts, changing systems of care, working with the federal government, and that is what takes a little bit more time.''

One of the working group members, Linda Katz, of the Economic Progress Institute, which advocates for poor people, said she is not overly concerned about Raimondo's "nothing is off the table'' comment, because the federal government has effectively taken eligibility cuts off the table.

"We've reduced coverage for parents as low as we can go and still participate in Medicaid. We are precluded from rolling back coverage for children for another couple of years, and the eligibility level for seniors and adults with disabilities is at the poverty level,'' she said.

As for the scope of benefits, Katz said she is confident a "data-driven discussion will show we are not overly generous," and also point to "strategies." She said she welcomes a "fact and data-driven discussion about strategies that can help us reduce costs and improve care," such as "providing more opportunities for home and community-based services for people."